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The OIG Publishes Reports Targeting IRFs

The Office of Inspector General (OIG) published two reports targeting inpatient rehabilitation facilities (IRF).  Most notable, however, is the CMS response to the OIG reports.  The first report reviewed IRF transmission of patient assessment instruments for calendar years (CY) 2006 and 2007.  This report showed that IRFs failed to timely submit patient assessment data and this could reduce the case-mix group payment. Based upon the OIG findings, CMS concluded that fiscal intermediaries (FI) overpaid IRFs approximately $20.2 million in CY 2006 and 2007.  Additionally, FIs may have overpaid $19 million because of a lack of clarity in the regulations regarding data for claims originally submitted within the 27-day timeframe, but then later resubmitted to correct errors outside the 27-day timeframe.

The second report addressed the issue of whether proper status codes were used on IRF claims.  When a patient is discharged to his or her home, Medicare pays the full prospective rate.  In contrast, if a patient is transferred from the IRF (to another IRF, a short-term, acute care prospective payment hospital, a long-term hospital or a nursing home that qualifies for Medicare or Medicaid payments), Medicare pays a reduced amount.  The OIG review found that out of 220 claims sampled, 213 claims were improperly coded as discharges.  This resulted in an overpayment of approximately $1.2 million.  For the four year period ending in September 2007, CMS determined the overpayments for this issue totaled approximately $34 million.  Of particular importance to IRFs is the fact that CMS has indicated that it will share the OIG audit information with the Recovery Audit Contractors (RACs) and encourage them to utilize the findings in their reviews.

For more information on Medicare audits, or for assistance with an audit, please visit or contact a Wachler & Associates attorney at 248-544-0888.

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